Network equipment vendor Tellabs added Atlantic Coast competitive service provider nTelos to the list of customers for its 7100 Optical Transport System. Based in Waynesboro, Va., nTelos provides triple play services across an eight-state region stretching from Tennessee to Pennsylvania. The operator, which recently doubled the size of its network with the acquisition of around 2,200 route miles of fiber from Allegheny Energy, will use the Tellabs gear to power services on its SONET, Ethernet, and 2.5G wireless platforms.
The nTelos win was welcome news for Tellabs, which has seen its share price seesaw since the network gear vendor reported its latest quarterly earnings in late April, particularly after a Morgan Stanley analyst predicted in a research note that AT&T would most likely choose other vendors for the build-out of its LTE network over the next two years. Tellabs’ stock lost one-third of its value between May 3 and June 8, before recovering somewhat the last few weeks.
Morgan Stanley downgraded the vendor’s shares after MS analyst Ehud Gelblum wrote that AT&T is planning a "relatively quick transition away from" Tellabs equipment to Cisco gear next year for the LTE deployment.
On the other hand, analysts at WallStreetEquityResearch.com believe that Tellabs, which reports its second-quarter earnings on July 27, is poised for strong growth in the second half of 2010. Tellabs should benefit from the wireless spectrum hike plan that was announced at the end of June by the Obama administration, analysts at the site said. “With its next-generation advanced IP-access products,” Tellabs “is already making great strides and looking to capitalize on the new plan by regulators to double wireless spectrum.”
